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New Washington State EV Fee Replaces Vanishing Gas Taxes

By Cheryl Kaften

TMCnet Contributor

While electric vehicle (EV) drivers in Washington may not be experiencing pain at the pump, they are pretty darn “sore” at the state legislature. As of 2013, EV owners will be charged an extra $100 on their new and annual vehicle registration fees, in order to cover their fair share of the cost of road repairs.

A law (SB 5251) passed during 2012 ensures that Washington State drivers who don’t pay gasoline taxes still will contribute to Department of Transportation infrastructure improvements.

Granted, $100 over the course of a year is much less expensive than paying Washington’s 37.5 cent gasoline tax. Still, the new law is controversial. Critics of the tax argue that EV owners may not pay gas taxes—but they do pay taxes on electricity, which they use to charge their cars.

"One hundred dollars isn't that big of a deal, but it's not well-balanced policy. EV drivers really want to pay their fair share but it seems ridiculous from a policy standpoint," said Jay Friedland, legislative director for Plug In America, a California-based electric vehicle advocacy group, in an interview with Associated Press (News - Alert). "The state, on the one hand, has given out sales tax exemptions to encourage residents to buy more electric vehicles, while charging the fee on the other hand."

Senator Mary Margaret Haugen (D), who sponsored the bill, commented, “We think the purchase of electric vehicles is great for the environment, but we also need to maintain our roads, which is why we have the gas tax,” she stated in the release. “Electric vehicles put just as much wear and tear on our roads as gas vehicles. This simply ensures that they contribute their fair share to the upkeep of our roads.”

With about 1,600 EVs registered to date in Washington, the new tax should net the state only $160,000 on an annual basis. The fee targets fully electric vehicles only, since hybrids still use gas and owners pay the fuel tax—and it provides an exemption for vehicles that do not travel faster than 35 miles per hour. As a result, Nissan’s Leaf and Tesla’s Roadster would be subject to the tax, while a Toyota’s Prius and Chevy’s Volt would avoid it.

After collections of the new fee reach a cumulative $1 million, 70 percent of receipts will be dispersed to the state’s Motor Vehicle Fund; 15 percent to the Transportation Improvement Account; and 15 percent to the rural Arterial Preservation Account.

Finding a way to generate sustainable revenues that will maintain and operate the transportation system is a topic of interest to nearly every state. Across the country, and even worldwide, there is immense interest in a "per-mile fee" or a "road-usage charge" to replace the current popular mode of generating funds, the gas tax. A bill introduced in Oregon in 2011 would have taxed EVs based on how far they traveled, at a rate of six cents mile. Bills that would impose fees on EV drivers have also been introduced in Kansas and Arizona, and the issue has undergone study in Utah.

The new Washington registration fee would be repealed if a vehicle-miles-traveled tax or fee—also under consideration by the state’s legislature—is imposed.

On the “Washington Votes” website where the bill was posted, one constituent remarked, “I can't wait for the windmill fee, the solar cell fee, and the microhydro fee.”